Luc Coene, governor of the National Bank of Belgium and member of the European Central Bank’s governing council, has stated that Greece’s problems are not over yet and that it is likely that the indebted nation will need another bailout. He predicts that approximately €10 billion will be required in the second half of 2014. Mr Coene is the latest troika politician to state he believes that Greece will not be out of the woods when the second bailout scheme comes to an end next year.
Recent German inflation data shows us that there was no change in the cost of living from July to August, and that the annual rate of inflation is 1.5%. Stagnant inflation suggests that consumer demand is low.
At 3pm (London time), the US will report the wholesale inventories for July, where economists are expecting an increase of 0.3%. Wholesale inventories have declined for the past three months which suggests that demand is outstripping supply. If today’s report comes in below expectations, we could see traders sell the euro and buy the US dollar.